Although one is cautioned to not fall in love with a stock, in Softbank's case perhaps a mild case of infatuation is in order. We should note that the runup in Softbank is not dependent on any one internet stock investment. Although Yahoo (US) currently represents 53% of Softbank's publicly traded portfolio and a combination of Yahoo USA and Yahoo Japan represents 80.13% of Softbank's publicly traded portfolio, the price of the SFTBF (9984) stock has not tracked Yahoo very closely. In fact when Yahoo peaked in early April and subsequently plunged for two months, Softbank was pretty flat for those two months suffering only a mild decline. When Yahoo jumped in early December, SFTBF actually declined into it's current plateau. Even with the recent runup in Yahoo to a new high, SFTBF has done much better. For the year to date, Softbank is up 1068% and Yahoo is up 242%.
I believe that this is indicative of the sophistication of the Softbank investors as a group. We all recognize that the value of Softbank is largely in the closely held stocks in the Softbank portfolio. Still, the rapid runup that occurred during November has to make everyone nervous. A "correction " was to be expected and has already happpened (and may still be continuing).
The problem for experienced, sophisticated investors is when to get out? My contact in Japan (a broker) actually bailed out near 40,000 Yen. Too bad for him <G>. I understand the instinct. Even Jay (understandably) lightened up a little at some point, but I still like this stock for a long term hold for at least the next two or three years. I suppose there is always the possibility of a total market meltdown which might take Softbank with it, but not many people have devised a way to time these things effectively.
Taxes will also dissuade some people from selling or attempting to trade Softbank. I actually have much of my Softbank in IRAs so I could do it without a concern for taxes. Still, I am holding for the long run. Everyone has to make their own decisions based on their own comfort level, but I view Softbank as a keeper. |
